Stem plans $350 million seven-year green convertible notes

By Wendy Van Sickle

Columbus, Ohio, Nov. 16 – Stem, Inc. plans to offer $350 million of green convertible senior notes due Dec. 1, 2028 with a $52.5 million greenshoe, according to a news release on Tuesday.

The Rule 144A offering is subject to market conditions.

The notes will be convertible into cash, shares of Stem or a combination thereof at Stem’s election. They will be redeemable at the issuer’s option on or after Dec. 5, 2025 and before the 45th scheduled trading day immediately before the maturity date, subject to a 130% price hurdle.

In connection with pricing the convertibles, Stem plans to enter into privately negotiated capped call transactions with one or more of the initial purchasers or their affiliates and/or other financial institutions. The capped call transactions are expected generally to reduce potential dilution to Stem’s common stock upon any conversion of the notes and/or offset any potential cash payments Stem is required to make in excess of the principal amount of converted notes, with such reduction or offset subject to a cap.

Stem plans to use a portion of the net proceeds from the offering to fund the cost of entering into the capped call transactions. The company plans to allocate an amount equivalent to the net proceeds of the offering to finance or refinance, in whole or in part, existing or new eligible green expenditures, including investments related to creating a more resilient clean energy system, optimized software capabilities for energy systems and reducing waste through operations.

Based in San Francisco, Stem provides advanced energy storage solutions alongside its AI-powered analytics platform to enable customers and partners to optimize energy use by automatically switching between battery power, onsite generation and grid power.

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